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Understanding the Different Kinds of Medical Insurance in India

The rising costs of healthcare in India do not surprise nowadays. Even a routine checkup with your regular doctor at a private hospital’s OPD can burn a small hole in your pocket. Serious illnesses, surgical procedures and hospitalizations almost always seem to cost a bomb, no matter where you get treated. Of course, there are differences in treatment costs if you compare Tier 1, Tier 2 and Tier 3 cities. But it’s a fact that medical costs are relatively high if you take the average living costs and income ranges in the city as a reference point. 

Along with the emotional stress of you or your loved ones undergoing a medical procedure, you are also burdened with the financial hassle of paying exorbitant costs for treatments. Having medical insurance is a life saver and also a face saver in these situations. Receiving coverage for expenses in the time of crisis is worth any amount of premium charged, but how do you decide which medical insurance to buy? Do you purchase a plan that covers your family? Does your age matter when you are choosing your insurance plan? If you think you have a predisposition for cancer because of family history then which medical plan should you buy? In this blog we will address all of these concerns and more.

Different Kinds of Medical Insurance in India

Let’s explore the different kinds of medical insurance policies available in India:

  1. Individual Health Insurance

The most common medical insurance policy is the individual health insurance policy. The individual health insurance plan covers the medical expenses for an individual. The coverage includes injury and illness related expenses, hospitalization expenses, diagnostic tests, room charges, pre and post-hospitalization care expenses and in some cases, follow-up visit charges as well. The premium charged depends on various factors like your age, medical history, habits (smoking status) and sum insured. If you want higher coverage, your sum insured will be higher and you will be charged a higher premium. Similarly, if you are a 35-year-old chain-smoker your premium will be of a greater amount than a 35-year-old non-smoker’s premium. Individual health insurance plans allow you to add your family members too by paying an extra premium. Each individual will have their individual sum insured amounts and claiming medical insurance for one member does not affect the sums insured of other members. For example, if you and your spouse have an individual health policy of Rs.5 Lakhs and you undergo an appendix removal surgery for Rs.2 Lakhs then your spouse’s sum insured will remain the same. If you fall within the age bracket of 18- 60 years and don’t have kids or other dependents, opting for an individual health insurance policy is the best bet for you. 

  1. Family Floater Health Insurance 

Family floater health insurance plans offer medical coverage for all members of the family (you, your spouse, kids, dependent parents etc.) under a single premium. The coverage is similar to the individual health insurance policy including injury and illness related expenses, hospitalization expenses, diagnostic tests, room charges, pre and post hospitalization care expenses etc. One major difference between the family floater and individual health insurance plans is that in family floater plans, the sum insured is common for all family members. That is, if you buy a family floater plan for Rs.5 lakhs and your spouse have a medical procedure that results in a medical insurance claim of Rs.2 lakhs, then the coverage for all other members will be Rs.3 lakhs. 

So, if you have a family member with a critical illness, it is wise to not purchase a family floater plan as the sum insured can get exhausted on just one member. The premiums for family floater plans are determined based on the age of the eldest member. An ideal situation to choose a family floater plan is if you are in your 30-40s with young kids with no family member who suffers from a critical illness. The advantage of a family floater plan is easier maintenance and renewals as well as a common sum insured that is more efficient to keep a track of. 

  1. Critical Illness Insurance

Regular health insurance policies often exclude severe illnesses like cancer, AIDS, heart disease etc. as they have expensive and long drawn treatments. This can be a disadvantage if you contract a critical illness and you can avail no benefits despite having a health insurance policy. It is a double whammy because you have paid premiums and still end up spending lakhs of rupees for treatment. Critical illness policies cover conditions like certain types of cancer, kidney failure, heart disease, strokes, paralysis, multiple sclerosis etc. The sum insured is usually in the form of a lump-sum that is used to cover treatment costs. Premiums are also generally high as the treatments are costly and done over a period of time. 

However, there is a wide range of coverage under a critical illness policy depending upon the insurance company you purchase it from. The specifications of the policy are known at the time of policy purchase. You can also use the amount insured to cover for loss of income during treatment. You can buy a critical illness add-on to your individual health insurance policy or buy a standalone critical illness policy depending upon your personal needs. If you have a family history of critical illnesses then you should consider purchasing a critical illness medical insurance policy to safeguard your health and to secure your and your family’s future. 

  1. Senior Citizen Insurance 

Senior citizens are at higher risk of contracting serious illnesses. Medical costs for treating senior citizens are also high. So, senior citizen health insurance plans are available for the elderly. Senior citizen policies ensure adequate medical coverage and hence, premiums charged are high. Policies usually have a maximum entry age, usually around 70-80 years. The benefits of a Senior Citizen plan are no pre-medical screening, coverage for pre-existing conditions, annual health checkups and cashless hospitalization. This type of insurance policy is a good option to protect your or your elderly parents/relative’s post-retirement years. 

  1. Group Health Insurance

Group health insurance policies are usually employer-provided health insurance covers. One of the biggest advantages of a group insurance plan is that the plan prices are low, insurance plans are better and there is more coverage for pre-existing conditions. The claims process for a group health insurance is simple and easy as most of the formalities are done by the employer, especially if you seek treatment at listed hospitals. 

However, one disadvantage is that you cannot customize a group health insurance policy because the premium for all the members of a particular group is the same and hence benefits offered are also identical. Group policies are a good choice as an additional safety cover for you. 

  1. Maternity Insurance

A maternity health insurance plan is a smart health insurance cover for pregnancy and other related costs. It covers delivery, pre-natal and post-natal hospitalizations and post-delivery care as well as hospitalizations. The usual waiting time for maternity insurance plans is 9 months. Maternity health insurances can also be availed with shorter waiting periods if you are willing to pay a higher premium. But with good family planning, maternity insurance plans bought well in advance help you get the maximum benefit and coverage for a new life. 

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What kind of a health insurance plan should I purchase if my spouse has a family history of heart disease?

You can get a medical examination done for your spouse and if the doctor doesn’t report any cause for concern, you can choose either two individual health insurance policies (One for you and an add-on for your spouse) or a family-floater policy if you have children and dependents. If your spouse has abnormalities or is in a risk-zone you can purchase a critical illness policy that covers cardiac disease (first heart attack, coronary bypass surgery, aorta graft etc.) This way you can make an informed choice that is the best option for your specific situation.

What age is a good age to purchase health insurance?

Ideally, you should purchase an individual health insurance plan as soon as you start earning and saving. In your early 20s, your health status will be stable and premium charged will be low. In case of an eventuality, you will have a cushion. Moreover, having a health insurance cover is a sign of healthy financial planning as you have the ability to save money for other goals and expenses.

My insurance policy has an upper limit for coverage per day. What can I do to avail benefits for all hospital charges during an emergency?

Some insurance policies have a daily limit on insurance coverage. To step around this problem, you can purchase an add-on Daily Cash Benefit plan. This kind of plan offers you a lump-sum amount for each day at the hospital irrespective of the actual amount you end up spending. So, if required, this plan will help you to get full or near-full coverage for your hospital expenses.

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